Professional Documents
Culture Documents
lR;eso t;rs
Ministry of Overseas
Indian Affairs
HANDBOOK
FOR
OVERSEAS INDIANS
i
This book has been compiled/summarised from information available in official documents/circulars/
websites of the Govt. of India, RBI, information received from various States and other reliable sources.
Every possible care has been taken to provide current and authentic information. This Handbook for
Overseas Indians is intended to serve as a guide to them and does not purport to be a legal document. In
case of any variation between what has been stated in this Handbook and the relevant Act, Rules,
Regulations, Policy Statements etc., the latter shall prevail.
ii
Vayalar Ravi Ministry of Overseas
Indian Affairs
lR;eso t;rs
FOREWORD
(VAYALAR RAVI)
Minister of Overseas Indian Affairs
iii
iv
PREFACE
v
ABOUT THE MINISTRY
The Indian Diaspora constitutes a significant economic, social and cultural force in the world.
Overseas Indians estimated at over twenty million are spread across 110 countries. Their industry,
enterprise, economic strength, education and professional skills are widely recognised. The
bond which holds this vast and diverse overseas Indian community together with India is
Indianness. The creation of the Ministry of Overseas Indian Affairs (MOIA) acknowledges the
fact that the welfare of Overseas Indians needs mainstream attention. The mission of the Ministry
is to promote, nurture and sustain a mutually beneficial and symbiotic relationship between
India and its diaspora.
The heterogeneous Indian diaspora spread across eight major regions of the world is a
product of different waves of migration over hundreds of years and have distinct
expectations from the home country. In facilitating the process of engagement the Ministry
seeks to provide for this wide range of roles and expectations.
The ministry also recognizes that the various States are important players in our Union
of States. Equally, they are central to sustainable and mutually beneficial engagement
between India and its diaspora. It must be recognized that any initiative that Overseas
Indians, individually or collectively, take must be anchored in one of the States. The States
are therefore encouraged to develop a stake in the entire process of engagement with the
diaspora and become natural stakeholder partners.
The Ministry of Overseas Indian Affairs is a young ministry. Initially established in May
2004 as the Ministry of Non-Resident Indian Affairs it was renamed as Ministry of
Overseas Indian Affairs (MOIA) in September 2004. The emigration division of
the Ministry of Labour and Employment was attached to the new Ministry in
December 2004. The NRI division of the Ministry of External Affairs (MEA) provides
support to the MOIA and now functions as the Diaspora division in the Ministry.
The Ministry is headed by a cabinet minister and is organized into four functional service
divisions: Diaspora Services, Financial Services, Employment Services, and Social Services. A
small team of eleven officers (Deputy Secretary and above) is working in the Ministry in a
delayered and multi-task mode.
The Protector General of Emigrants administers the Emigration Act, 1983. He oversees the
eight field offices of the protectors of emigrants located at Chandigarh, Chennai, Cochin, Delhi,
Hyderabad, Kolkata, Mumbai and Thiruvananthapuram.
INDEX
PARTICULARS
Definitions
1. Introduction 1
1.1 Overview of Indias Economy 3
1.2 Business Environment in India 5
1.3 Incentives and Concessions for NRIs/OIs 6
2. FDI/NRI Investment in India 9
2.1 Policy on FDI/NRI Investment 11
2.2 Procedures 12
2.3 Entry Options for Investors 16
2.4 Special Economic Zones (SEZs) 19
2.5 Business Opportunities in various States 25
3. Tax Incentives for NRIs 33
4. Other Investment Opportunities in India 39
4.1 Shares and Securities 41
4.2 Loans & Overdrafts 43
4.3 Immovable Property 45
4.4 Remittance Facilities for NRIs/PIOs 47
4.5 Philanthropy by NGOs 48
5. Other Important Matters 53
5.1 Overseas Citizenship of India 55
5.2 PIO Card 61
5.3 Other Important Schemes of the Ministry 67
5.4 Baggage Rules & Visa Rules 71
5.5 Frequently Asked Questions 76
5.6 List of Important Websites 81
Contact details 83
Annexures 85
Annexures I-VIII 87-106
Feedback Form 107
DEFINITIONS
A foreign national, who was eligible to become a citizen of India on 26.01.1950 or was a citizen of
India on or at any time after 26.01.1950 or belonged to a territory that became part of India after
15.08.1947 and his/her children and grand children, is eligible for registration as an Overseas
Citizen of India (OCI). Minor children of such person are also eligible for OCI. However, if
the applicant had ever been a citizen of Pakistan or Bangladesh he/she will not be eligible for
OCI.
Section 2 of the Foreign Exchange Management Act, 1999 (FEMA) deals with various
definitions. It defines a person resident in India and a person resident outside India. However,
it does not define the term non-resident nor it does define the term Non Resident Indian
(NRI).
However, Notification No. 5/2000-RB (dealing with various kinds of Bank Accounts) defines
the term Non Resident Indian (NRI) to mean a person resident outside India who is either a
citizen of India or is a person of Indian origin. In short, the definition of the term NRI is
contextual and can have slightly different connotations for FEMA/Income Tax/Acquisition
of Immovable Property etc.
Under the FEMA, a person resident in India means a person residing in India for more than 182
days during the course of the preceding financial year and who has come to or stays in India
either for taking up employment, carrying on business or vocation in India or for any other
purpose, that would indicate his intention to stay in India for an uncertain period. In other
words, to be treated as a person resident in India under FEMA a person has not only to satisfy
the condition of the period of stay (being more than 182 days during the course of the preceding
financial year) but has to comply with the condition of purpose/ intention of stay.(For details
see FEMA, 1999).
DETERMINATION OF RESIDENTIAL STATUS OF AN ASSESSEE UNDER THE INCOME TAX ACT
Who is a Person of Indian Origin (PIO)?
b) he/she or either of his/her parents or his/her grandparents was a citizen of India by virtue
of the Constitution of India or the Citizenship Act, 1955(57 of 1955) or
c) the person is a spouse of an Indian citizen or a person referred to in clause (a) or (b) above.
Person of Indian Origin means an individual (not being a citizen of Pakistan or Bangladesh or
Afghanistan or Bhutan or Sri Lanka or Nepal or China or Iran):
b) who or either of whose father or whose grandfather was a citizen of India by virtue of the
Constitution of India or the Citizenship Act, 1955(57 of 1955)
A foreign citizen if he/she at any time held an Indian Passport; or he/she or either of his/her parents
or grand parents or great grand parents was born in and permanently resident in India as defined in the
Government of India Act,1935 or his/her spouse (for details, see Chapter 5 on PIOs).
Prior to deletion of OCB as a class of investors with effect from September 16, 2003 the term Overseas
Corporate Body was defined as a company, partnership firm, society and other corporate body wholly
owned, directly or indirectly, to the extent of at least sixty percent by Non-Resident Indians and included
overseas trusts in which not less than sixty percent beneficial interest is held by Non-Resident Indians,
directly or indirectly but irrevocably.
However, OCBs which had prior to September, 16, 2003 availed of investment facilities under various
schemes have general permission to continue to hold/transfer/gift (to Non Resident Indians/Residents
in India) their existing investments in shares/convertible debentures/securities of Indian companies.
Indian companies can allot bonus shares accruing to the OCBs. Those which are incorporated in the host
country and are not under adverse notice of RBI may be considered, for undertaking fresh investments,
as incorporated non-resident entities by RBI/Government on case by case basis.
BANK ACCOUNTS
NRIs/PIOs are permitted to open bank accounts in India out of funds remitted from abroad, foreign
exchange brought in from abroad or out of funds legitimately due to them in India.
Such accounts can be opened with banks specially authorised by the Reserve Bank in this behalf
[Authorised Dealers].
RUPEE ACCOUNTS
1) Non- Resident (External) Rupee Accounts (NRE Accounts)
NRIs and PIOs are eligible to open NRE Accounts. These are rupee denominated accounts. Accounts
can be in the form of savings, current, recurring or fixed deposit accounts. Accounts can be opened by
remittance of funds in free foreign exchange. Foreign exchange brought in legally, repatriable incomes of
the account holder, etc. can be credited to the account. Joint operation with other NRIs/PIOs is permitted.
Power of attorney can be granted to residents for operation of accounts for limited purposes.
The deposits can be used for all legitimate purposes. The balance in the account is freely repatriable.
Interest lying to the credit of NRE accounts is exempt from tax in the hands of the NRI.
Funds held in NRE accounts may be freely transferred to Foreign Currency Non Resident (FCNR) accounts
of the same account holder. Likewise, funds held in FCNR accounts may be transferred to NRE accounts
of the same account holder.
These are Rupee dominated non-repatriable accounts and can be in the form of savings, current, recurring
or fixed deposits. These accounts can be opened jointly with residents in India. When an Indian National
/PIO resident in India leaves for taking up employment etc. outside the country, other than Nepal or
Bhutan, his bank account in India gets designated as NRO account.
The deposits can be used to make all legitimate payments in rupees. Interest income from NRO accounts
is taxable. Interest income, net of taxes is repatriable. Authorised dealers may allow remittances upto US
$ 1 million, per calendar year, out of balances held in NRO account for any bonafide purpose.
FOREIGN CURRENCY ACCOUNTS
3) Foreign Currency Non Resident (Bank) Accounts (FCNR (B) Accounts)
NRIs/PIOs are permitted to open such accounts in US dollars, Sterling Pounds, Japanese Yen, Euro,
Canadian Dollars and Australian Dollars. The accounts may be opened in the form of term deposit
for any of the three maturity periods viz; (a) one year and above but less then two years (b) two years
and above but less then three years and (c) three years only. Now RBI has allowed banks to accept
FCNR (B) deposits upto maximum maturity period of five years.
Interest income is tax free in the hands of the NRI until he maintains a non-resident status or a
resident but not ordinarily resident status under the Indian tax laws.
FCNR (B) accounts can also be utilised for local disbursement including payment for exports from
India, repatriation of funds abroad and for making investments in India, as per foreign investment
guidelines.
CHAPTER - 1
INTRODUCTION
INTRODUCTION
India is the largest democracy and 4th largest economy (in terms of purchase power parity) in the world. India
is also the tenth most industrialized country in the world. With its consistent growth performance and abundant
high-skilled manpower, India provides enormous opportunities for investment, both domestic and foreign.
Major reform initiatives have been taken since 1991, in the fields of investment, trade, financial sector,
exchange control simplification of procedures, enactment of competition and amendments in the intellectual
property right laws, etc.
The service sector improved its performance significantly from 7.9% in 2002-03 to 9.1% in 2003-04. The
strong performance of the capital goods sector coupled with increased imports of capital goods also augurs
well for domestic capacity expansion in a large number of industries. The present trend indicates a positive
outlook for industrial growth due to improved capacity utilization, improved industrial climate, expanding
external and domestic demand and ease in availability of credit.
The strong and positive outlook of both foreign and domestic investors indicates that India is ready for a big
push as the growing interest of foreign investors is coinciding with the rising confidence of domestic private
investors. The increasing efficiency and competitiveness of domestic producers, liberalized trade, and
deregulated interest rate regime are critical contributors to both growth acceleration and macro economic
stability.
Government has put in place a liberal, transparent and investor friendly Foreign Direct Investment policy
(FDI), wherein FDI upto 100% is allowed under automatic route for most of the sectors/activities, where
the investor does not require any prior approval. Only notification to the Reserve Bank of India within 30
days of inward remittance or issue of shares to non-residents is required. Cases requiring prior Government
approval are considered by the Foreign Investment Promotion Board (FIPB) in a time bound and transparent
manner. The FDI policy in India is considered as one of the most liberal, with very few barriers.
Proposals for conversion of NRI investment into repatriable equity are hitherto being considered by the
FIPB for approval. This procedure has been reviewed in the context of various liberalization measures taken
by the Government in the recent past. It is clarified that in terms of Press Note 4 (2001 series), all proposals
would qualify for conversion of non-repatriable equity into repatriable equity under the automatic route
provided:
P The original investment by the NRI was made in foreign exchange under the FDI Scheme
P The sector/activity in which the investment is proposed to be converted into repatriable equity is
on the automatic route for FDI.
v Guidelines for approval of foreign/ technical collaborations for project with existing joint venture/
collaboration in the same field have been reviewed.
As a measure towards simplification of the existing procedures in FDI, the following activities have been
placed on the general permission route of RBI:
v Transfer of shares in an existing Indian company from residents to non residents and vice-versa
(except in the financial sector and where SEBI takeover code is attracted);
v Conversion of ECB/loan into equity, provided the activity is covered under the automatic route
and the foreign equity after such conversion falls within the sectoral cap;
v Conversion of preference shares into equity provided the increase in foreign equity participated
is within the sectoral cap and the activity is the automatic route; and
v Conversion of non-repatriable equity invested by NRIs in foreign exchange into repatriable equity
allowed under the automatic route provided the original investment was made in foreign exchange
under the FDI scheme notified under the FEMA regulation and the sector/activity is which the
investment is proposed to be converted into repatriable equity is on the automatic route for FDI.
2. Proposals in which the foreign collaborator has an existing financial / technical collaboration in
India in the same field (Press Note no. 1 of 2005 series),
P Where Securities & Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulation, 1997 is attracted;
4. All proposals falling outside notified sectoral policies/caps or under sectors in which FDI is not
permitted. (Refer Annexure II )
FDI policy is reviewed on an on going basis and changes in sectoral policy /sectoral equity cap are notified
through Press Notes by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and
Promotion. All Press Notes are available at the Website (www.dipp.gov.in). Reserve Bank of India (RBI)
under Foreign Exchange Management Act (FEMA) also notifies FDI policy. Please refer to RBI website
(www.rbi.org.in).
PROHIBITED SECTORS
The extant policy does not permit FDI in the following cases;
1. Gambling and Betting
2. Lottery Business
3. Atomic Energy
4. Retail Trading
2.2 PROCEDURES
PROCEDURE UNDER AUTOMATIC ROUTE
FDI in sector/ activities to the extent permitted under automatic route does not require any prior approval
either by Government of India or RBI. The investors are only required to notify the Regional office concerned
of RBI within 30 days of receipt of inward remittances and file the required documents with that office
within 30 days of issue of shares to foreign investors.
Such applications for FDI cases, except Non-Resident Indian (NRI) investments and 100% Export Oriented
Units (EOUs), should be submitted to the FIPB Unit, Department of Economic Affairs (DEA), Ministry of
Finance.
Applications for NRI and 100% EOU cases should be presented to SIA in Department of Industrial Policy
and Promotion.
Applications can also be submitted with Indian Missions abroad who forward them to the Department of
Economic Affairs for further processing.
Applications can be made in Form FC-IL which can be downloaded from www.dipp.gov.in. Plain paper
applications carrying all relevant details are also accepted. No fee is payable.
The Reserve Bank of India has now further simplified financial transactions by NRIs/PIOs by granting
general permissions to:
1. Resident individuals, partnership/proprietorship concerns to avail of interest bearing rupee loans from
NRIs/PIOs out of funds remitted by them from abroad or out of funds held in their bank accounts in
India, on non repatriation basis, subject to certain conditions; one of them being that the rate of
interest on such loans should not exceed Bank Rate plus two percentage points.
2. NRIs/PIOs to transfer by way of gift shares held by them in Indian companies and to transfer by way
of gift immovable property held by them in India subject to compliance with other applicable rules/
regulations including the provisions of Foreign Contribution Regulations Act, 1976 by the charitable
trust/organisation concerned.
3. All domestic public/private sector mutual funds for issue of units to NRIs/PIOs on both repatriation
and non repatriation basis.
4. NRIs/PIOs to place deposits with Indian firms, on non-repatriation basis and with Indian companies
on non-repatriation basis out of domestic sources.
5. NRIs/PIOs for sale of shares acquired under direct investment Schemes on stock exchanges in India.
6. NRIs/PIOs for transfer of shares, by way of sale under private arrangement to another NRI or to a
resident.
7. RBI permission is not required for drawal of foreign exchange for purchase of trade marks or franchise
in India.
8. NRIs/PIOs may remit the sale proceeds of immovable property without the lock in period of 10 years
subject to maximum of 1 million USD per calendar year.
NRIs/PIOs have been granted general permission to invest in Government Securities and Treasury Bills.
Taking into account the facilities that are already available, and the above new measures, NRIs/PIOs will
not have to seek specific permission of Reserve Bank for a whole variety of approved financial/investment
transactions. This should considerably reduce paper work and time taken for undertaking such transactions.
1. Capital contribution to any NRIs can invest by way of capital contribution in any proprietary or
proprietary or partnership partnership concern in India provided the firm or the proprietary
concern concern is not engaged in any agricultural/plantation activities or
real estate business or print media on non- repatriation basis subject
to certain conditions.
2. New issues of shares/ NRIs have been granted general permission to subscribe to the shares/
debentures of Indian convertible debentures of an Indian company on non- repatriation
companies basis, and to an Indian company to issue shares or convertible
debentures by way of new/rights/bonus to NRIs on non- repatriation
basis provided that the investee company is not engaged in
agricultural/plantation activities or real estate business (excluding real
estate development i.e., development of property or construction of
houses ) or chit fund or is not a Nidhi Company.
ENTRY OPTIONS
A foreign company planning to set up business operations in India has the following options:
AS AN INCORPORATED ENTITY
By incorporating a company under the Companies Act, 1956 through
i Joint Ventures; or
Foreign Equity in such Indian Companies can be up to 100% depending on the requirement of the
investor, subject to any equity caps prescribed in respect of the area of activities under the Foreign
Direct Investment (FDI) policy.
AS AN UNINCORPORATED ENTITY
i) As a foreign Company through
Such offices can undertake activities permitted under the Foreign Exchange Management (Establishment
in India of Branch or Office or other place of business) Regulations, 2000.
INCORPORATION OF A COMPANY
For registration and incorporation, an application has to be filed with the Registrar of Companies
(ROC). Once a company has been duly registered and incorporated as an Indian Company, it is subject
to Indian Laws and regulations as applicable to other domestic Indian companies.
For details please visit the website of Ministry of Company Affairs at www.mca.gov.in.
PROJECT OFFICE
Foreign Companies planning to execute specific projects in India can set up a temporary project /site
offices in India. RBI has now granted a general permission to foreign entities to establish Project Offices
subject to specified conditions. Such offices can not undertake or carry on any activity other than
activity relating and incidental to execution of the project. Project offices may remit outside India the
surplus of the project on its completion, general permission for which has been granted by the RBI.
BRANCH OFFICE
Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch
Offices in India for the following purposes:
a. Export/Import of goods
d. Promoting technical or financial collaborations between Indian companies and parent or overseas group
company.
e. Representing the parent company in India and acting as buying/selling agents in India.
g. Rendering technical support to the products supplied by the parent/ group companies.
Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of
applicable Indian taxes and subject to RBI guidelines. Permission for setting up branch offices is granted by
the Reserve Bank of India (RBI).
No approval shall be necessary from RBI for a company to establish a branch /unit in SEZs to undertake
manufacturing and service activities subject to the following conditions:
a. Such units are functioning in those sectors where 100% FDI is permitted.
b. Such units comply with part XI of the Companies Act(section 592 to 602)
d. In the event of winding up of business and for remittance of winding-up proceeds, the branch shall
approach an authorized dealer in foreign exchange with the document required as per FEMA.
ii) The firm or proprietary concern is not engaged in any agricultural/plantation or real estate business i.e.
dealing in land and immovable property with a view to earning profit or earning income there from.
iii) Amount invested shall not be eligible for repatriation outside India.
NRIs/PIOs may invest in sole proprietorship concerns/ partnership firms with repatriation benefits with the
approval of Department of Economic Affairs, Government of India/ RBI.
Distinguishing Features
Indian SEZ Act, 2005 has following distinguishing features:
1. The zones are proposed to setup by private sector or by State Govt. in association with Private
sector. Private sector is also invited to develop infrastructure facility in the existing SEZs.
3. A framework is being developed by creating special by creating special windows under existing
rules and regulations of the Central Govt. and State Govt. for SEZ.
With a view to augmenting infrastructure facilities for export production it has been decided to permit
the setting up of Special Economic Zones (SEZs) in the public, private, joint sector or by the State
Govt. The minimum size of the Special Economic Zone shall not be less than 1000 hectares. Minimum
area requirement shall, however, not be applicable to product specific and port/airport based SEZ.
This measure is expected to promote self contained areas supported by world-class infrastructure oriented
towards export production. Any private /public/joint sector or State Govt. or its agencies can set up
Special Economic Zone (SEZ)
(i) Minimum size of the SEZ shall not be less than 1000 hectares. This would however, not apply to
existing EPZs converting into SEZs as such or for notifying additional area as a part of such SEZ or to
product specific port/airport based SEZs.
(ii) The SEZ and units therein shall abide by local laws, rules , regulations or bye-laws in regard to area
planning, sewerage disposal, pollution control and the like . They shall also comply with industrial and
labour laws and such other laws /rules and regulations as may be locally applicable.
(iii) Such SEZ shall make adequate arrangements to fulfill all the requirements of laws, rules and
procedures applicable to such SEZ.
(iv) Only units approved under the SEZ schemes would be permitted to be located in these SEZ.
(v) At least 25% area of the SEZ shall be used for developing industrial area for setting up such units.
How to apply
Applications (15 copies) indicating the name and address of the applicant, status of the promoter (whether
individual/ private company/ State Govt. /NRIs etc.) along with a project report covering the following
particulars shall be submitted to the Chief Secretary of the State:
i) Location of the proposed zone with details of the existing and proposed infrastructure,
ii) Area of the proposed SEZ and its area distance from the nearest Sea Port/ Airport/ Rail/ Road head
etc.
iii) Financial details including investment proposed, mode of financing the project and viability of the
project.
v) Whether the zone will allow only certain specific industries or will be a multinational zone or it is a port
/airport based zone.
The State Govt. shall, forward it along with their commitment to the following , to the Department of
Commerce , Govt. of India.
The area incorporated in the proposed Special Economic Zone is free from environmental prohibition;
Water and Electricity and other services would be provided as required;
Full exemption in electricity duty and tax on sale of electricity for self generated and purchase power;
To allow generation, transmission and distribution of power within SEZ.
vi) Exemption from State Sales Tax, Octroi, Mandi tax, Turnover tax and taxes, duty, cess, levies on supply
of goods from Domestic Tariff Area to SEZ units;
vii) For units inside the Zone, the power under the Industrial Dispute Act and other related Act would be
delegated to the Development Commissioner.
viii) The Zone will be declared as a Public Utility Service under Industrial Dispute Act.
ix) Single point clearances system would be provided to the units in the Zone under State Laws/ Rules.
The proposal incorporating the commitments of the State Govt. shall be considered by the Board of
Approval (BOA) as notified vide notification No 14/ 1 / 2001-EPZ dated 7.8.2001.
On acceptance of the proposal by the Board of Approval , the Department of Commerce will issue a
Letter of Permission to the applicant;
v Income tax exemption for a block period of 10 year in 15 years at the option of developer as per Section
80IAB of the Income Tax Act .
v Full freedom in allocation of developed plots to approved SEZ units on a purely commercial basis.
v Full authority to provide service like water, electricity, security , restaurants, recreation centers etc. on
commercial lines.
v Foreign investment permitted to develop township within the SEZ with residential area , market, play
grounds, clubs, recreation centers etc.
v Income Tax Exemption to investors in SEZs under Section 10(23G) of Income Tax Act.
v Investment made by individuals etc. in SEZ company also eligible for exemption u/s 88 of the Income
Tax Act.
v Development promoted to transfer infrastructure facility for operation and maintenance u/s 80-IA of
the Income Tax Act.
v Exemption from custom duty on import of capital goods, raw materials, consumable spares etc.
v Exemption from Central Excise duty on procurement of Capital goods, raw materials, consumables
spares etc. from the domestic market.
v 100% income tax exemption for a block period of 5 years, 50% tax exemption for next five years
u/s 10AA of the Income Tax Act.
v 100% income tax exemption for 5 consecutive years & 50% for 5 years under section 80LA of the
income tax Act for off shore banking units
v Reimbursement of duty paid on furnace oil, procured from domestic oil companies to SEZ units as per
the rate of drawback notified by the Directorate General of Foreign Trade.
v SEZ unit to be positive net foreign net exchange earner within three years.
v 100% foreign direct investment in Manufacturing, sector allowed through automatic route barring a few
sectors.
v Re-export imported goods found defective, goods imported from foreign supplier on loan basis etc.
without G.R. Waiver under intimation to the Development Commissioner
v Exemption from industrial licensing requirement for items reserved for SSI sectors
How to apply
For setting up a unit in an SEZ, three copies of the application in the specified form may be submitted to the
Development Commissioner (DC) of the SEZ Concerned.
Proposals for setting up units in the SEZ other than those requiring Industrial Licence may be granted
approval by Development Commissioner within 15 Days.
Proposals for setting up units in the SEZ requiring Industrial Licence may be granted approval by the
Development Commissioner after clearance of the proposal by the SEZ Board of Approval and Department
of Industrial Policy and Promotion within 45 Days.
Letter of permission (LOP) / Letter of Intent (LOI) issued to SEZ units by the Development Commissioner
would be construed as a licence for all purposes, including for procurement of raw material and consumables
either directly or through canalizing agency.
The LOP/LOI shall specify the items of manufacture/service activity, annual capacity, projected annual
export for the first years in dollar terms, Net Foreign Exchange Earning (NFE), limitations, if any, regarding
sale of finished goods, by products and rejects in the DTA and such other matter as may be necessary and
also impose such conditions as may be required.
Performance of the unit will be monitored by a committee consisting of Development Commissioner of the
Zone and Customs.
Units shall maintain proper accounts and furnish details regarding value of import, export etc. to Development
Commissioner on a quarterly basis.
(i) Residence proof in respect of individual/partnership firms of all Directors/ Partners. (Passport/ ration
card/ driving licence /voter identity card or any other proof to the satisfaction of Development
Commissioner;
(ii) Income Tax return of all the promoters for the last three years;
(vi) A report from other DCs as to whether any case under SEZ/EOU Schemes in regard to diversion of
goods etc. is pending.
Whether necessary, the above may be verified through personal interview with the promoters of the project.
In the event of the promoters being a well-established entity, the procedure of personal interview may be
dispensed with.
Recycling of ferrous and non-ferrous metal proposal will be considered only if the unit has Ingots
making facility and proposes to achieve value addition.
Sensitive Sectors
Care shall be taken by the Development Commissioner while approving projects in sensitive sectors
such as yarn texturising unit, textile processing, pharmaceuticals/ drugs formulations/ recycling of
ferrous and non-ferrous metal scraps etc. Projects for setting up units in sensitive sectors under EOU
schemes shall be approved by the Development Commissioner after personal verification of the Directors
and inspection of the factory site before signing LUT. Verification could also be carried out through
General Manager, District Industries Centre or jurisdictional DY/ Assistant Commissioner of Excise/
Customs.
SI. NAME SINGLE WINDOW WEBSITE EMAIL: ID THRUST AREAS FOR INVESTMENT
NO OF STATES AGENCY/FIRST
SINGLE POINT
CONTACT
1 ANDHRA Commissioner of Industries aponline.gov.in. comm_inds@ap.gov.in Agro and Food processing, Pharmaceuticals and
PRADESH Chirag Ali Lane, Abids, www.apind.gov.in Chemical, Biotechnology, Mining & Mineral, IT,
Hyderabad - 500 001 Electronic Hardware, Auto & Auto Components,
Tel. No: +91 40 23441666, Steel Plants, Precision Machine Tools, Leather
23441610. Fax: +91 40 23441611 & Textiles.
jd_cc@inds.ap.gov.in
2 KARNATAKA KARNATAKAUDYOGMITRA www.kumba md@kumbangalore.com Information Technology, Biotechnology,
#49, Khanija Bhavan, 3rd Floor ngalore.com Pharmaceuticals, Engineering Automobiles & Auto
Race Course Road components, Manufacturing, Maintenance, Repair
& Bangalore-560 001 Overhaul services for Aerospace, Apparel,
Phone: 080-22282392/ Contract Research / R&D, Oil Refining &
5659/6632Fax: 080-22266063 Petrochemicals, Agro
& Food processing Steel & Metallurgy, Cement,
Electronics & Telecommunications, Precision
Engineering, Machine Tools, Floriculture,
Tourism and Infrastructure.
3 GUJARAT Industrial Extension Bureau www.indextb.com indextb@indextb.com Power, Port, Road, Information Technology, Agro,
(iNDEXTb) Mineral, Tourism
(A Government of Gujarat
Organization)Block No. 18/2,
5 KERALA Kerala State Industrial www.ksidc.org E mail: di-wb@ Tourism& Hospitality, Information
Development hotmail.com Technology, Business Process Outsourcing, Healthcare &
Corporation Ltd.(KSIDC) Medical Tourism, Manufacturing, Infrastructure,
9 TAMIL NADU Tamil Nadu Industrial http://www.tiic.org tiicltd@vsnl.com Mines, Generation of Electricity, Nursing Homes,
Guidance & Export Packaging, Hotels, Agro, Research & Development, Bore
Promotion Bureau, Well Rigs, Road laying equipment, manufacturing,
Govt Industries Deptt, processing or preservation of goods.
Secretariat, Chennai - 600 009.
Ph : 25671383 Fax : 25670822
10 UTTAR Udyog bandhu, 12 C, Mall www.udyogban bandhu@sancharnet.in Textile, Agriculture,Leather, Export Promotion
PRADESH Avenue, Lucknow - 226001 dhu.org Industrial Park, Software Technology Parks, Special
Ph. +91-0522 2237726, www.upsidc.com. Economic Zones, Power, automobiles and ancillaries.
2238508 Fax - 2237345
Uttar Pradesh State
Industrial Development
Corporation, UPSIDC
Complex,A-1/4 Lakhanpur,
Kanpur.Tel: 0512-2582851,
2582852,2582853
Fax: 0512-2580797
11 BIHAR Director, Industries Vikas http://gov.bih. dirind@doibihar.org Agro based industries, Industries based on medicinal
Bhawan Patna - 800 001. nic.in dibihar@yahoo.co.in and aromatic plants, Sericulture /Tasar, Chemical based
(Bihar) India. Phone : 91-612- industries, Power generating and allied industries,
2235812(O) Electronic and computers and IT based industries,
Fax : 91-612-2226637 Industries based on non-conventional energy, live
13 ORISSA 1. Industrial Promotion and www.ipicolorissa. info@ipicolorissa.com i. Mining and Mineral based Industry
Investment Corporation of com ii. Petroleum and Petrochemicals
Orissa Limited (IPICOL), www.orissa. iii. Thermal Power plants
'Shilpa Jyoti'IPICOL House, gov.in iv. Ancillary, downstream and construction phase
Janpath,Bhubaneswar-751022, industries for the above
Orissa.Tel.- +91-674- 2542601- v. IT and ITES
03, Fax- +91-674- 2543766 vi. Tourism
2. Orissa Investment and http://rc. rescm-or@nic.in vii. Agri-business and Food Processing
Export Promotion Office orissa.gov.in viii. Fisheries and Marine aquaculture
(OIEPO), Office of Resident ix. Engineering / Auto-componentx. Infrastructure
Commissioner, Govt. of development
Orissa, Orissa Niwas, 4
Bordoloi Marg, Chankyapuri,
New Delhi-110021.
Tel. +91-11-23019771/
23014250,
Fax- +91-11-23010839 http://164.100. diorissa@ori.nic.in
3. Director of Industries, 140.22/diorissa/
(for Small Scale Industries)
Ministry of Overseas Indian Affairs
LIMITED
Post Box. No. 19060
Romain Rolland Street
Pondicherry - 605 001, India
Telephone : 91 - 413 - 2334606,
2335116, 2334361, 2336842,
2334064 Fax : 91 - 413 - 2336842
15 PUNJAB Industrial Facilitation Cell, http://punjabgovt. pws@punjabmail.gov.
Udyog Sahayak Chief nic.in/Industry/ inpsidc@chd.nic.in ,
Coordinator, Directorate of UdyogSahayak. psidc@dot1.net.in
Industries, Punjab, 18 htm#contact
Himalya Marg, Udyog Bhawan,
Sector 17, Chandigarh 160017
Tel No. 91-0172-2715270,
2715320, 2715344,
Fax No. 91-0172-2776992
The Punjab State
Industrial
Development
Corporation Limited
Telephones EPABX : 91-172-
702881-84, 702791
Fax:91-172-704145
16 HARYANA Investment Promotion Centre, http://www.haryana. ipcchd@hry.nic.in Agro based and Food Processing Industry, Electronics
18 JHARKHAND Directorate of Industry, www.jharkhand doijharkhand@ Mining and mineral based Industries, Agro based
Nepal House, 3rd Floor, industry. in. doijharkhand.net Industries, Industries based on medicinal aromatic
Doronda, Ranchi plants, Sericulture/Tasar, Forest based Industry like
Tel: +91- 651 -2491844 shellac, bamboo etc, Engineering, auto component, iron
Commerce, Government of assam.nic.in/ Paper & Stationery, Rubber & Polymer Products,
Assam, Udyog Bhawan, Chemical & Medical Products, Machinery & Metal
Bamunimaidam, Tools, Misc. like - Shoe Polish,
Guwahati 781021 Tooth Paste, Water Filter,
Tel: +91-361-2550242 Leather based Products & Mineral based
Fax: 91-361-2550717 Industries etc.
21 JAMMU & (Nov- Apr)Directorate of http://jammu dipjk@jk.nic.in
KASHMIR Information Jammu & kashmir.nic.in
Kashmir Government Old
Secretariat Mubark Maudi
Ministry of Overseas Indian Affairs
Complex, Jammu-180001
Tel:0191-2544076, 2540088,
2578835 Fax:0191-2544643
(May- Oct.)
Directorate of Information
Jammu & Kashmir Govt.
Opposite Partap Park,
Abhi Guzar Lal Chowk,
Srinagar. Tel: 0194-2452294,
2452437,2481980, 2459172
Fax No.:0194-2452227
22 HIMACHAL The Himachal Pradesh State www.hpsidc.nic.in hpsidc@sancharnet.in Floriculture, Medicinal herbs and aromatic herbs etc. -
PRADESH Industrial Development processing, honey, Horticulture and Agro based
Corporation, New Himrus industries, Food Processing Industry, Sugar and its by-
Building, Circular Road products, Silk and silk products, Wool and wool
Shimla - 171001 products, Woven fabrics (Excisable garments), Sports
Tel: + 91- 177 2624751/2/4 goods, tourism, Pharma products, Eco-tourism,
2625422 Fax: + 91- 177 2624278 Handicrafts, Bottling of mineral water, Automobile
Manufacturing units, Cold Storage Units, fruits/
vegetables/ spice based wineries, production of
ciders/ ale, Sericulture/ handlooms/ Khadi
industry, Electronic units etc.
(a) is in India in that year for an aggregate period of 182 days or more; or
(b) having within the four years preceding that year been in India for a period of 365 days or more, is
in India in that year for an aggregate period of 60 days or more.
The above provisions are applicable to all individuals irrespective of their nationality. However, as a
special concession for Indian citizens and foreign citizens of Indian origin, the period of 60 days referred
to in Clause (b) above, will be extended to 182 days in two cases: (i) where an Indian citizen leaves India
in any year for employment outside India; and (ii) where an Indian citizen or a foreign citizen of Indian
origin (NRI), who is outside India, comes on a visit to India.
In the above context, an individual visiting India several times during the relevant "previous year"
should note that judicial authorities in India have held that both the days of entry and exit are counted
while calculating the number of days stay in India, irrespective of however short the time spent in India
on those two days may be.
A "Non-Resident" is merely defined as a person who is not a "Resident" i.e. one who does not satisfy
either of the two prescribed tests of residence.
An individual, who is defined as Resident in a given financial year is said to be "Not Ordinarily Resident"
in any previous year if he has been a Non-Resident in India nine out of the 10 preceding previous years
or he has during the seven preceding previous years been in India for a period of, or periods amounting
in all to, 729 days or less.
Till 31st March, 2003, "Not Ordinarily Resident" was defined as a person who has not been resident in
India in nine out of 10 preceding previous years or he has not during the seven preceding previous
years been in India for a period of, or periods amounting in all to, 730 days or more.
(d) Long term capital gains arising from transfer of equity shares in a company and/or equity oriented
schemes of Mutual Funds, which are subject to Securities Transaction Tax.
It should be noted that the tax exemptions relating to NRE bank deposits will cease immediately upon the
NRI/PIO becoming a resident in India whereas the interest on FCNR bank deposits will continue to be tax
free as long as the NRI maintains the status of Resident but Not Ordinarily Resident or until maturity,
whichever is earlier.
The above exemption may not have much relevance now since the Finance Act 1992 has considerably
reduced the scope of wealth tax. With effect from 1st April, 1993, wealth tax is being levied only on non-
productive assets like urban land, buildings (except one house property), jewellery, bullion, vehicles, cash
over Rs.50,000/- etc. The current rate of wealth-tax is 1% on the aggregate market value of chargeable
assets as on 31st March every year in excess of Rs.1.5 million.
However, it may be noted that NRls are also liable to pay wealth tax if the market value of taxable assets as
on 31st March exceeds Rs l.5 million.
With regard to gifts of foreign exchange or specified assets made by NRls to their relatives in India, it should
be noted that
1. Gifts made by an NRI/PIO to his or her spouse, minor children or son's wife will involve clubbing of
income and wealth in the hands of the donor-NRI/ PIO.
2. In the case of gifts to minor children the clubbing of income, as above, will cease upon such children
attaining the age of 18 years.
3. The clubbing provisions will apply, in case of gift to spouse or son's wife in India, only to the first-stage
of income from the original gift. Second-stage income arising from investment of the income from the
original gift is not clubbed and this will constitute the separate wealth/income of the donee- spouse.
Generally, the income of minor children, from any source (including income from gifts from parents) is
clubbed with the income of the parent whose total chargeable income is greater.
1. All gifts received by residents from NRls/PlOs may be subject to the tax authorities requiring the
recipient to provide evidence as regards the identity and financial capacity of the donor and
genuineness of the gift.
2. Under the Foreign Exchange Management Act, 1999 no approval from Reserve Bank of India
(RBI) is necessary for the resident donee to hold gifted immovable property outside India provided
the said property is gifted by a person resident outside India. General permission, subject to certain
conditions, is granted by RBI for the resident donees to hold foreign moveable properties such as
shares and securities gifted by NRI/PIO donors.
3. The Income Tax Act has now provided that any sum of money exceeding Rs.25, 000 received
without consideration (i.e., gift) by an individual from any person on or after 1st September, 2004,
the whole of such sum will be chargeable to income-tax in the assessment of recipient (i.e., donee)
under that head "Income from other sources" for and from assessment year 2005-06 and onwards.
However, the above provisions will not apply to any sum of money (gift) received
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer.
The term "Relative" is defined as:
(1) spouse of the individual;
(2) brother or sister of the individual;
(3) brother or sister of the spouse of the individual;
(4) brother or sister of either of the parents of the individual;
(5) any lineal ascendant or descendant of the individual;
(6) any lineal ascendant or descendant of the spouse of the individual; and
(7) spouse of the person referred to in (2) to (6).
Scope of Receipts
· As per plain reading of the provision, any receipt without consideration, save exclusions, whether
capital or otherwise, may be considered as income.
· Similar receipts by any person (such as a partnership firm, a company, and Association of Persons
AOP etc.), other than an individual or a Hindu Undivided Family, would not constitute income in
its hands.
· The provision would apply to an individual irrespective of his residential status. Accordingly, any
receipt in India by a non-resident of the nature discussed above would be considered as income in
his hands.
· The receipts should be in the form of money. Accordingly, any gift in kind would not be taxable.
(ii) Purchases, sale of shares (Preference and Equity) and/or convertible debentures are covered.
(iv) One bank branch must be designated by NRIs and all purchase/sale must be routed through that
designated bank branch only.
(v) All transactions of sales and purchase must be delivery based. Speculative transactions are not allowed.
Besides the above two, investment can be made out of NRO account.
- 5% of the paid-up value of shares of an Indian Company on both repatriation and non-
repatriation basis.
(Total holding by all NRIs put together on both repatriable as well as non-repatriable basis.)
This ceiling of 10% could be increased to 24%, if the General Body of concerned Indian Company passes a
special resolution to that effect.
(a) Sales proceeds of Investment held on repatriation basis can be credited to NRE/FCNR/NRO
account after payment of applicable taxes.
(ix) Existing OCBs (i.e. prior to Sep 16, 2003) must intimate the designated bank branch immediately on
the holding/interest of NRIs in the OCB becoming less than 60%.
(x) NRIs are allowed to enter into forward contracts to hedge their investment made in India.
(xi) NRI is also permitted to invest in exchange traded derivatives contracts approved by SEBI from time to
time out of his Rupee funds held in India on Non-Repatriable basis subject to the limits prescribed by
SEBI.
(xii) NRIs can also invest without limit on repatriable basis in Government dated securities, treasury bills,
units of domestic mutual funds, bonds issued by PSUs, shares in Public Sector Enterprises which are
being disinvested by Government. They can also invest without limit on non-repatriable basis in
Government Dated Securities, Treasury Bills, units of Domestic Mutual Funds, units of Money Market
Mutual Funds. However, NRIs are not permitted to make Investments in Small Savings Schemes
including PPF.
ü The amount of loan is received by inward remittance in free foreign exchange through normal
banking channels or by debit to the NRE/FCNR account of the non-resident lender.
The loan has to be utilised for meeting the borrower's personal requirement or for his business purposes and
under no circumstances be used for relending or for investment in shares, securities or immovable property.
The rate of interest shall not exceed 2% over the bank rate prevailing on the date of availing of loan.
The loan is non-repatriable. Hence the loan amount cannot be credited to the NRIs NRE/FCNR accounts.
The repayment of the loans should be by direct remittance from abroad or by way of debit to the NRE /
FCNR account or by way of sale of shares and immovable property.
A branch outside India of an Authorised Dealer may grant loan against the security of NRE/FCNR deposit.
Authorised Dealers may grant forex loans in India against security of FCNR to the account holder only and
not to third parties, with approval of board of bank, provided the loan period does not exceed the maturity
period of the deposit and the loan is not used for investment in India. The document should be executed by
the deposit holder himself and not by his Power of Attorney holder.
The repayment of the loan may be made either by adjusting the deposit against the loan or by fresh remittances
from abroad. Repayment may be made by using the NRO account also. However in that case, interest has to
be charged at full commercial rate in force.
Temporary Overdrawings
Authorised Dealers may allow overdrawings in NRE savings bank accounts, up to a limit of Rs 50,000. Such
overdrawings together with the interest should be cleared within 2 weeks, out of inward remittances through
normal banking channels or by transfer of funds from other NRE/FCNR accounts.
Citizens of eight countries, namely, (Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal. or
Bhutan (whether resident in India or not) are prohibited from acquiring or transferring any IP in India without
prior approval of the RBI. However, such a prohibition is not applicable to IP acquired on lease for a period
not exceeding five years.
General Prohibition
Investment in agricultural property, plantation and farmhouse is prohibited for all classes of persons resident
outside India, be it NRIs/OCBs/ foreign citizens or other foreign entities.
Table-1 : Transaction of Immovable Property
Indian Citizen Resident
Outside India may
NRI PIO Resident Note
Purchase Property From Yes Yes Yes
Sell Property To Yes Yes Yes
Receive Gift From Yes Yes Yes
Give Gift To Yes Yes Yes
Agricultural Property
Purchase Property From No No No
Sell Property To No No Yes
Receive Gift From No No No
Give Gift To No No Yes
All situations not falling in the category of the general permissions, including requests for acquisition of
agricultural land by any ROI may be made to The Chief General Manager, Reserve Bank of India, Exchange
Control Department, Foreign Investment Decision (III), Mumbai-400 001 (India).
Where the house is purchased through housing finance and the house is rented out, the entire rental income,
even if it is more than the prescribed instalment, should be adjusted towards repayment of the loan. If the
rental income is less then the prescribed instalment, the borrower should remit the amount of the extent of
the shortfall from abroad or pay it out of his NRE, FCNR or NRO account in India.
NRIs/PIO have the option to credit the current income to their Non-Resident (External) Rupee account
provided the authorized dealer is satisfied that the credit represents current income of the non-resident
account holder and income tax thereon has been deducted/provided for.
Introduction
Any organisation working for a social, cultural, economic, educational or religious cause is termed as an
NGO. NGOs have made favorable indents to needy sections of Indian society at par with a constantly
changing socio-economic climate. NGOs have reached out to all sections of society including women,
children, pavement dwellers, unorganised workers, youth, slum-dwellers and landless labourers.
SOCIETY
A Society is formed when people come together to do something with some common purpose which is legal
and useful for others. A society should generally not get into profit making activities.
TRUST
What is a Charitable Trust?
A charitable trust is a legal entity which can be set up by anyone who has decided to commit themselves in
principle to setting aside some of their assets or income for charitable causes. Trusts are completely
independent of government or any external control. The main obligation is to work within the charitable
purposes and the powers set out in the Trust Deed.
Features of a Trust
A Trust is created when a donor attaches a legal obligation to the ownership of certain property based on his
confidence placed in and accepted by the donee or trustee, for the benefit of another.
The persons who intends to create the trust with regard to certain property for a specified beneficiary and
who places his confidence in another for this arrangement is called the Author of the Trust; the person who
accepts the confidence is called the Trustee; the person whose benefit the confidence is accepted is called
the Beneficiary; the subject matter of the trust is called Trust Property.
Charity is a matter for State control, so different States of India have their own legislation in the form of
Trusts or Endowment Acts to govern and regulate public charitable NGOs.
The author of the trust must indicate with reasonable certainty the following:
A public trust is of permanent and indefinite character. A public trust benefits the public at large or at least
a section of the community.
The property forming subject matter of the trust must be capable of being transferable to the beneficiary -
thus property which is inalienable by virtue of public policy or statute does not form valid subject matter for
a trust. In terms of section 8 of the Indian Trusts Act, there cannot be as a trust of a beneficial interest under
a trust i.e. there cannot be a trust upon a trust.
Objectives of a non-profit company can include promotion of commerce, art, science, religion, charity or
any other useful object. Profits are applied for promoting only the objects of the company and no dividend is
paid to its members (Section 25 (1) (a) and (b) of the Companies Act, 1956). A non-profit company may be
public or private. If the non-profit company is a private company a minimum of only two members are
required to form it. However, if the non-profit company is for a public purpose, then a minimum of seven
are needed. A 'section 25 company' is eligible for certain exemption from provisions of law and concessional
rate of fees etc.
FOREIGN CONTRIBUTION
Prior Permission always
The Foreign Contribution (Regulation) Act, 1976 (FCRA) requires all Indian NGOs that receive foreign
contributions to receive clearance from the Ministry of Home Affairs, in the form of either permanent
FCRA registration or prior permission on a case-to-case basis.
The procedure for obtaining prior permission from the FCRA is as follows:
1) Apply in Form FC - 1A
Applicant (s) to file Form FC - 1A along with required documents
Within 90 days thereafter, you will receive a registered letter from the Department either granting the
permission or stating rejection of your request.
You can re-apply after ascertaining and rectifying objections on your file. You can also file an appeal in
the High Court within 60 days of the date of letter.
4) Applying again
One party can apply for prior permission more then once if needed - considering that projects are
varied and or are under different agencies.
Prior permission from the FCRA is not required for receiving amounts in the following forms:-
(a) Salary, wages or other remuneration either to individual or payment for business purposes.
(b) Payment for international trade or for business transacted by him outside India.
An NGO is required to open and use bank account exclusively for foreign funds under FCRA.
Incomes received by any religious or charitable trust or institution registered with the income tax
authorities, is not taxable as long as this income is applied for the objects of the organisation.
2. Benefits to Donors :
The donors are also entitled to get an exemption on their donation where exemption can be 50% or
100% depending on the category of organisations.
· Form FC-3 is to be filed at the end of each financial year (by 31st July). Filing required to be done
annually till such time the FCRA funds are exhausted.
· Documents to attach with Form FC-8 - Attach one copy of each of the following documents
6. Where NGO is a society, then also attach certified copy of Registration Certificate issued by the
Registrar of Societies;
8. Certified copies of (a) Memorandum and Articles of Association, (b) registration certificate issued
by the Registrar of Companies, (c) section 25 license issued by the Regional Director, Department
of Company Affairs (if NGO is a non-profit company);
9. FCRA does not allow mixing up of Indian funds and FCRA funds. This means both funds are to be
maintained separately.
Persons of Indian Origin ( PIOs) of certain category, as specified below, who migrated from India and
acquired citizenship of a foreign country other than Pakistan and Bangladesh, are eligible for grant of OCI.
(ii) Exemption from registration with Police authorities for any length of stay in India; and
(iii) Parity with NRIs in financial, economic and educational fields except in the acquisition of agricultural
or plantation properties.
Persons registered as OCI have not been given any voting rights, election to Lok Sabha / Rajya Sabha /
Legislative Assembly / Council, holding Constitutional posts such as President, Vice President, Judge of
Supreme Court / High Court etc.
Any further benefits to OCIs will be notified by the Ministry of Overseas Indian Affairs (MOIA) under
section 7B (1) of the citizenship Act, 1955.
A person registered as OCI for five years is eligible to apply for grant of Indian citizenship under section 5(1)
(g) of the Citizenship Act, 1955 if he/she has been residing in India for one year out of the five years before
making the application.
1. Eligibility Criteria:
A foreign national, who was eligible to become citizen of India on 26.01.1950 or was a citizen of India on or
at anytime after 26.01.1950 or belonged to a territory that became part of India after 15.08.1947 and his/her
children and grand children.
(a) being eligible to become a citizen of India at the time of commencement of the Constitution; or
(b) belonging to a territory that became part of India after 15th August, 1947; or
3. Evidence of relationship as parent / grand parent, if their Indian origin is claimed as basis for grant of
OCI.
4. Application fee by way of Demand Draft (US $ 275 for each applicant or equivalent in local currency; US
$ 25 or equivalent in local currency for each PIO card holder)
5. PIO card holders must also submit a copy of their PIO card.
The application form completed in all respects along with enclosures should be submitted in duplicate to the
Indian Mission / Post of the country of applicant's citizenship or where he/she is not in the country of
citizenship to the Indian Mission / Post of the country in which he / she is ordinarily resident. If the
applicant is in India, he / she can apply to the Foreigners Regional Registration Officer (FRRO) at Delhi,
Mumbai, Kolkata or Amritsar or Chief Immigration Officer (CHIO) Chennai or to the Under Secretary, OCI
Cell, Citizenship Section, Foreigners Division, Ministry of Home Affairs (MHA), Jaisalmer House, 26
Mansingh Road, New Delhi - 110011.
After preliminary scrutiny, if there is any adverse information against the applicant, prior approval of MHA
shall be required before grant of registration. MHA may approve or reject the grant of registration within 120
days from the date of the receipt of the application. If the grant of registration as OCI is approved by MHA,
the Indian Mission / Post shall register the person as OCI.
If the application is filed in India, registration shall be granted by MHA by following the above
procedure.
After grant of registration, a registration certificate in the form of booklet will be issued and a multiple entry,
multi-purpose life long OCI 'U' Visa Sticker will be pasted on the foreign passport of the applicant.
5. OCI for persons who have applied on the earlier prescribed application form:
All such applications will be considered for grant of OCI on the same line as in 3 above without seeking fresh
application and fees.
7. Help Desk:
For any clarification/query on the scheme, please visit the website www.mha.nic.in. or visit the website of
the local Indian Mission / Post or contact the Indian Mission / Post or OCI Cell, Citizenship Section,
Foreigners Division, Ministry of Home Affairs, Jaisalmer House, 26 Mansingh Road, New Delhi - 110011.
APPLICATION FEES
For application to be filed in India, an amount of Rs. 12,650 has to be paid for each applicant by Demand
Draft in Favor of " Pay and Account Officer (Secretariat), Ministry of Home Affairs" payable at New Delhi.
In case of PIO Card holder, an amount of Rs.1,150 has to be paid.
In case of application to be filed outside India, for the amount of fee to be paid in local currency, please visit
the web site of the respective Indian Mission / Post.
Any person who or either of whose parents or any of whose grand-parents was born in India as defined in the
Government of India Act, 1935 (as originally enacted), and who was ordinarily residing in any country
outside India was eligible to become citizen of India on 26.01.1950.
4. Can children of parents, wherein one of the parents is eligible for OCI, can apply for OCI?
Yes.
Yes. Part A of the application form can be filed online at website www.mha.nic.in.. Part B can be downloaded
and printed on computer or by hand in Block letters. Printed Part A and Part B of the application form have
to be submitted to the Indian Mission/Post/Office.
7. Whether the applicant(s) have to take oath before the Counsel of the Indian Mission/Post?
No. Earlier provision in this regard has been done away with.
Yes.
All the applications will be subject to pre or post enquiry depending on whether any adverse information is
available or not. If the Government comes to the knowledge that any false information was furnished or
material information was suppressed, the registration as OCI already granted shall be cancelled by an order
under Section 7D of the Citizenship Act, 1955. The persons will also be blacklisted banning his/her entry
into India.
US $ 275 or equivalent in local currency for each applicant. In case of PIO card holder, US $ 25 or equivalent
in local currency for each applicant.
Within 30 days of the application, if there is no adverse information available against the applicant. If any
adverse information is available against the applicant, the decision to grant or otherwise is taken within 120
days.
12. If the registration as OCI is not granted, what amount will be refunded?
13. Will the PIO Card holder be granted OCI registration gratis?
No. He/she has to make a payment of US $ 25 equivalent in local currency along with the application.
No. The visa sticker will be pasted on the foreign passport. For this purpose, the applicant has to send the
original passport to the Indian Mission / Post after receipt of the acceptance letter/ verifying the status of
the application online.
Yes. For this purpose, an application has to be made to the Indian Mission / Post with evidence for loss of
certificate. In case of mutilated/damaged certificate an application has to be made enclosing the same. The
applications in both the cases have to be made to the same Indian Mission / Post which issued the certificate
alongwith with payment of fee of US $ 25 or equivalent in local currency.
16. Will a new OCI visa sticker be issued on the new foreign passport after the expiry of the old
passport?
Yes. On payment of requisite fee, a new OCI 'U' visa sticker will be issued. However, the application can
continue to carry the old passport for visiting India without seeking a new visa, as the visa is for lifelong.
17. Can a person holding OCI travel to protected area/restricted area without permission?
No. He/she will be required to seek PAP/RAP (Protected/Restricted Area Permission) for such visits.
18. Would the Indian civil/criminal laws be applicable to persons registered as OCI?
Yes. As per the provisions of Section 5(1) (g) of the Citizenship Act, 1955, a person who is registered as OCI
for 5 years and residing in India for 1 year out of the aforementioned 5 year, is eligible to apply for Indian
citizenship.
No.
21. Can OCI be granted to foreign nationals who are not eligible for OCI, but married to persons
who are eligible for OCI?
No.
23. What are the advantages of OCI when compared to PIO cardholders?
OCI is entitled to life long visa free travel to India whereas for PIO cardholder, it is for 15 years.
PIO cardholder is required to register with the local police authority for stay exceeding 180 days in India on
any single visit whereas OCI is exempted from registration with police authority for any length of stay in
India.
25. Whether an OCI be entitled to apply for and obtain a normal Indian passport, which is given to
a citizen of India?
Yes. He/she has to declare intention of renunciation in Form XXII to the Indian Mission /Post where OCI
registration was granted. After receipt of the declaration, the Indian Mission/Post shall issue an
acknowledgement in Form XXII A.
The fees for the card, which will have a validity of 15 years, would be Rs.15, 000/- and for the minor (below
18 years), the fees is Rs.7,500/-.
(b) Admission of children in educational institution in India under the general category quota for
NRIs-including medical/engineering colleges, IITs, IIMs etc.;
(c) Various housing schemes of Life Insurance Corporation of India, State Government and other
Government agencies;
(d) Special counters at the immigration check post for speedy clearance.
(v) All future benefits that would be extended to NRIs would also be made to PIO Card holders
PIO cards issued earlier as per PIO Card Scheme for US $1000 will continue to remain valid without
any extra fee, with validity extendable by 10 more years.
11.How can He/she is As per As per section 5 (1) Registered OCI may be
one acquire an Indian section 5 (1) (a) & 5(1) (c) of the granted Indian
Indian citizen (a) & 5(1) Citizenship Act, he/ citizenship after 5 years
(c) of the she has to reside in from date of registration
Citizenship India for minimum provided he/she stays for
Act, he/ 7 years before making one year in India before
citizenship application for granting making application
she has to Indian citizenship
reside in
India for
minimum
7 years before
making
application
for granting
Indian
citizenship
1. E-remittance gateway
Overseas Indians have limited choice of either using the fast but expensive facility or the economic but
relatively slow facility to remit money back home. Keeping this in view, the ministry has partnered with the
UTI bank to develop an integrated, universal, electronic remittance gateway that combines the virtues of
economy, speed and convenience. This portal will also extend advisory services on investment, taxation and
real estate to potential and interested overseas Indians, which would enable overseas Indians to remit money
to India to designated accounts in any of the14,500 bank branches, operating on Real Time Gross Settlement
(RTGS) network of the RBI. The facility is operational between Doha and India at present. In the last two
months over 9000 remittances totaling about Rs 8040 lakhs have been made. The advisory services are fully
operational and are available on the www.overseasindian.in portal. The remittance gateway is targeted to be
fully operational in the GCC countries, to begin with by January 2007.
The project would develop best practice guidelines for delivery of health care in the pilot villages which will
be replicated by in the other areas. The scheme would initiate capacity building of the community to ensure
prescribed health care standards in primary health care.
The scheme will be implemented in partnership with the AAPI in the selected states of Bihar and Andhra
Pradesh. To begin with pilot projects will be initiated in one village in all the districts of both the states. The
funding will be done by the Central Government and Partner states while AAPI will be the knowledge
partner. To achieve the objectives intensive training of trainers from primary to tertiary level will be organized
by AAPI in collaboration with local partners.
· The Pravasi Bhartiya Bima Yojana, 2006 provides for an insurance cover of a minimum sum of Rs. 5.00
lakhs payable to the nominee/legal heir in the event of death or permanent disability of any Indian
· In the case of death, besides the cost of transporting the dead body, the Insurance Company shall also
reimburse the cost incurred on one-way airfare of one attendant.
· If a worker is not received by the employer on his arrival to the destination abroad or there is any
substantive change in Employment Contract to his disadvantage or if the employment is pre-maturely
terminated within the period of employment for no fault of the emigrant, the Insurance Company shall
reimburse one way economy class airfare provided the grounds of repatriation are certified by the
concerned Indian Mission/Post.
· In cases where the Indian Mission/Post arranges the repatriation, the Insurance Company shall re-
imburse the actual expenses to the concerned Indian Mission/Post.
· The Insured person shall be reimbursed actual one way economy class airfare by the Insurance Company
if he falls sick or is declared medically unfit to commence or continue working and the service contract
is terminated by the Foreign Employer within twelve months of taking the insurance.
· The Insurance Policy shall be valid for a minimum period of two years or the actual period of contract,
whichever is longer.
· The Insurance Policy shall also provide medical cover of a minimum of Rs. 50,000/- as cash-less
hospitalization and/or reimbursement of actual medical expenses of the insured emigrant workers on
grounds of accidental injuries and/or sickness/ailments/diseases occurring during the period of insurance
whether in India or in the country of his employment.
· An insured person shall be covered for a minimum sum of Rs. 25,000/- in connection with the legal
expenses incurred by him in any litigation relating to his/her employment.
· The Insurance Policy shall also provide maternity benefits, subject to a minimum cover of Rs. 20,000/
- in case of women emigrants. In case of medical treatment in the country of employment, the maternity
benefits would be provided if the concerned Indian Mission/Post certifies the requisite documents.
· The family of emigrant worker in India consisting of spouse and two dependent children up to twenty
one years of age shall be entitled to hospitalization cover in the event of death or permanent disability
of the insured person for a maximum amount or Rs. 25,000/- per annum.
· The Insurance Companies shall charge fair and reasonable premium. Service tax will be charged as
applicable.
In the changing competitive environment of world economy Indian workers were going abroad are slowly
losing their jobs to the more skilled workers coming from other countries. The orientation programme and
skill up gradation training will help Indian workers retain their jobs and also enable them to earn more wages
and return more money as remittance in the country. There would be inputs on human behavior, recruitment,
visa and emigration procedures as well as elementary inputs in bookkeeping
The scheme is implemented through the state Government labour departments and overseas manpower
corporations who will arrange the training of the potential overseas Indian workers. MOIA will give funds
upto Rs. 1 crore to each of the participating state during the financial year for the training of at most 10,000
workers.
Under KIP, full local hospitality is provided by the Government. Selected Interns are received and seen off
at the airport. They have to pay only the international airfare. The Ministry of Overseas Indian Affairs
issues a circular to all Indian Missions/Posts abroad in this regard. Interested students and young professionals
from Indian diaspora should get in touch with the Indian Mission/Post nearer to them for detailed information
in this regard. The age of the Intern should be between 18 and 25 years. The main objectives of the program
are to create awareness about the phenomenal transformation taking place in India and the country's progress
from just a destination for culture, heritage and art to an emerging powerhouse in the global economic
system, build linkages to bridge the information gap and to prepare a blueprint for creating a sustained
mechanism for engaging the Diaspora youth with India.
The Social Security Agreement negotiated by the Ministry Of Overseas Indian Affairs with Belgium provides
for the following benefits to Indians and Belgians working in each other's countries:
1. Those working on a short-term contract of up to sixty months are exempted from social security
contributions in the host country provided they continue to make social security payments in their
home countries.
2. Those who live and work for periods longer than sixty months and make social security contributions
under the host country laws will be entitled to the export of the social security benefits should they
relocate to the home country on completion of their contract or on retirement.
3. These benefits will also be available to employees sent by a company to the host country from a third
country.
4. Self-employed Indians in Belgium contributing to the Belgian social security system will be entitled to
the export of social security benefits should they choose to relocate to India.
The Ministry of Overseas Indian Affairs is already negotiating similar agreements with countries like The
Netherlands and France.
BAGGAGE RULES
Baggage Rules is an aspect of customs network which the common man going abroad or returning from
abroad has to deal with at customs.
(2) new articles up to a value of Rs. 12,000/- per adult passenger ( Rs. 25,000/- if the person returns
to India after more than three days) are exempt.
A lower Free Allowance of Rs. 6,000/- is allowed to passengers coming ( after 3 days) from Nepal, Bhutan,
Burma or China provided they do not come across land borders with these countries.
Passengers returning from Pakistan by road are allowed duty free baggage up to Rs. 12,000/-.
For child passengers (below 10 years of age), free allowance is 50% of the allowance admissible to an adult
passenger of that category.
The General Free Allowance of passenger is not clubbable with similar allowance of another passenger ( for
example, husband or wife or any other relative traveling with the passenger ) to permit clearance of a costly
article of baggage.
Laptop computer ( computer notebook ) brought by a passenger of the age of 18 years and above has been
exempted w.e.f from 9-1-2004.
Alcoholic liquor or wines up to two litres, 200 cigarettes and jewellery upto Rs. 20,000/- for a lady and Rs.
10,000/- for a gentleman can be brought as part of the free baggage allowance. Import of cinematography
films, exposed but not developed, brought as part of baggage has also been made duty free.
In case a single article exceeding the limit of Rs. 12,000 ( or Rs. 25,000 in value) is brought, 35% flat rate of
duty with no SAD or CVD is payable on excess value. 40% without SAD & CVD is also the effective rate of
duty for any article of bona fide baggage brought in excess of free allowance except for fire arms, cartridges
of fire arms exceeding 50 and excess cigarettes, cigars or tobacco.
But in terms of exemption Notification No. 49/96-Cus., dated 23-7-1996, specified goods covered under
listed Headings and Notifications therein attract merit rate ( as applicable to cargo) even if imported as
baggage. Conditions, if any, prescribed in the listed Notification will apply to imports under baggage also.
Free allowance is restricted in case of visit to contiguous countries like Maldives, Sri Lanka, Nepal and
Bhutan.
'Baggage' does not include motor vehicle, fire arms and goods of commercial nature or in commercial quantities.
There are value/ quantity restrictions on bringing jewellery, cigarettes and liquor. However, primary gold up
to ten kgs. per passenger and silver up to one hundred kgs. per passenger can be imported on payment of
normal duties in convertible foreign exchange provided the concerned passenger is coming to India after at
Transfer of Residence
In the case of passengers transferring their residence to India after stay abroad of two years or more,
personal and household effects in use abroad and six new specified household gadgets are exempt from
duty but 15 % flat duty without SAD has to be paid on 17 listed articles of consumer durables within
value ceiling of 5 lakhs. In the case of transfer of residence after stay abroad of at least one year, other
personal and household effects in use abroad and not exceeding Rs. 75,000/- in aggregate value can be
brought in free. In addition, there are free allowances of varying value for professional artisans coming
to India after 3 months/6 months ( duty free household article worth Rs. 12,000/- and professional
equipment worth Rs. 20,000/- /40,000/).
Allowance for gifts as well as for travel souvenirs in the case of foreign tourists is Rs. 8,000/-( Rs.6,000/
- in the case of tourists from Pakistan origin), apart from personal effects in use of the tourist. Peak rate
of duty for baggage goods of Heading 98.03 is 150% non-bona fide baggage is in addition to fine and
penalty.
Foreign Travel Tax and Inland Air Travel Tax have been exempted for all passengers with effect from 9-
1-2004.
Passengers not carrying any dutiable goods can walk through the Green Channel. Others are required
to come to the Red Channel and report at customs counter. There are now no restrictions on resale of
baggage goods.
Passengers importing / exporting commercial samples as accompanied baggage should follow the
procedure laid down in this behalf. If an importer is desirous of paying duty on an article at the cargo
rate but by mistake he has brought the said article as baggage, he can rectify the error by filling an
application before the authorities along with submission of a bill of entry (Collector v. A.K.Dhawan).
Please visit the website www.cbec.gov.in for the complete Baggage Rules 1998.
VISA RULES
UNITED KINGDOM
Visa application forms (available at http://www.hcilondon.net) should be accompanied for all types of
visas by two photographs and applicant's original passport should have validity of six months.
Type of Visa Other requirements/conditions
Tourist Visa Nil
Business Visa Letter explaining the nature of business and duration from UK company
and letter of invitation from an Indian Company
Conference Visa Letter of invitation from the conference organizer
Transit Visa Evidence of onward travel outside India is required
Entry Visa Issued to People of Indian Origin only
Long Term Visa This settlement visa is issued to people of Indian origin
Student Visa Letter of admission from recognized educational institution with duration
of the course
Journalist Visa Letter from employer where applicable
Employment Visa An employment contract signed by both the parties should be submitted
MAURITIUS
Visa application forms (available at http://indiahighcom.intnet.mu) should be accompanied for all
types of visas by three passport size photographs, photocopy of confirmed return air ticket and
applicant's original passport should have validity of six months.
MALAYSIA
Visa application forms (available at http://www.indianhighcommission.com.my) should be
accompanied for all types of visas by three photographs and applicant's original passport should have
validity of six months.
CANADA
Visa application forms (available at http://www.hciottawa.ca) should be accompanied for all types of
visas by one photograph for the business visa and two photographs for the rest and a valid passport.
Ans. Foreign companies can make investments or operate their business in a number of ways such as Liaison/
Representative Office, Project Office, Branch Office, 100% Wholly owned subsidiary and Joint venture
company. The requisite approval can be granted by Reserve Bank of India (RBI) or Foreign Investment
promotion Board (FIPB). Any company set up with FDI has to be incorporated under the Indian Companies
Act with the Registrar of Companies, Department of Company Affairs and all Indian operations would be
conducted through this company.
Ans. In the New Industrial Policy, all industrial undertakings are exempt from licensing except for those
industries given in Annexure I and II and those reserved for the Small Scale Sector. The project should not be
located within 25 kilometres of a city with a population of more than one million as per 1991 Population
Census.
The Government has substantially liberalised the procedures for obtaining an Industrial Licence. The application
in form IL-FC should be filed with the SIA. Approvals normally granted within 6-8 weeks.
Ans. An Industrial undertaking exempted from licensing needs only to file information in the Industrial
Entrepreneurs Memorandum (IEM) with the SIA, which will issue an acknowledgement. No further approvals
are required.
Ans. Foreign nationals working in India are generally taxed only on their Indian income.Income received
from sources outside India is not taxable unless it is received in India.The Indian tax laws provide for exemption
of tax on certain kinds of income earned for services rendered in India. Further, foreign nationals have the
option of being taxed under the tax treaties that India may have signed with their country of residence.
Ans. Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central &
State Governments are competent to enact legislation subject to certain matters being reserved for the
Centre. Some of the important Labour Acts, which are applicable for carrying out business in India, are
Ans. India is a signatory to the agreement concluding the Uruguay Round of GATT negotiations and
establishing the World Trade Organisation (WTO). This Agreement, inter-alia, contains an Agreement on
Trade Related Aspects of Intellectual Property Rights (TRIPS), which came into force from 1st January 1995.
It lays down minimum standards for protection and enforcement of Intellectual Property Rights in member
countries, which are required to promote effective and adequate protection of Intellectual Property Rights
with a view to reducing distortions and impediments to international trade. The obligations under the TRIPS
Agreement relate to provision of minimum standards of protection within the member countrys legal systems
and practices.
As regards the status of various Intellectual Property laws in India and standards in respect of various areas
of intellectual property, a law on Trade Marks has been passed by Parliament and notified in the gazette on
30.12.1999. This law repeals and replaces the earlier Trade & Merchandise Act, 1958. A new law for the
protection of Geographical Indications, viz., the Geographical Indications of Goods (Registration and the
Protection) Act, 1999 has also been passed by the Parliament and notified on 30.12.1999. The Rules required
under the Act were notified vide Notification No. G.S.R. 176 (E) dated 8th March, 2002. The Act and the
Rules have been brought into force simultaneously with the setting up of Intellectual Property Appellate
Board (IPAB) under the Trade Marks Act, 1999 on September 15, 2003. A law called the Designs Act, 2000
relating to Industrial Designs which repeals and replaces the earlier Designs Act, 1911 has also been passed
by Parliament in its Budget Session, 2000. The Act has been brought into force from 11.05.2001. A Bill on
Patents to amend the Patents Act, 1970 was passed by Parliament on 14.05.2002. The amendment to the
patent law has been made operational in May 2003.
Ans. The Government attaches importance to investments by NRIs. Government has provided a liberalised
policy framework for approval of NRI investments through both the Automatic and the Government route.
NRIs are permitted to invest up to 100% equity in the Real Estate and Civil Aviation Sectors. Automatic
Approval is given by the RBI to all NRI proposals with their investment up to 100% for all items/activities
except a few exceptions mentioned in Press Note 2 (2000 series) read with sector specific guidelines.
Government approval is given for all proposals not qualifying for Automatic Approval.
Ans. All profits, dividends, royalty, know how payments that have been approved by the Government/RBI
can be repatriated. Some sectors like investment in development of integrated township, NRI Investment in
real estates, etc. may attract a lock-in period.
9. What are the formalities a joint venture company has to complete to increase the foreign equity
holding?
Ans: The following formalities are required for the joint ventures that want to increase in their foreign
equity holding by acquisition of shares or by any other means.
a) If only the quantum of foreign equity increased without change in percentage then Press Note no.
7 (1999 series) may be followed.
b) For increase in percentage of foreign equity by way of expansion of capital base, automatic route
or FIPB / Government route would apply depending upon the nature of proposal in terms of Press
Note No. 2 (2000 series)
c) Cases involving increase in percentage in foreign equity by way of acquiring existing shares in an
Indian company would necessarily require prior approval of FIPB/Government.
d) In cases involving inclusion of an additional foreign collaborator, guidelines laid down in Press
Note No. 18 (1998 series) would have to be satisfied.
10. What is the policy of conversion of non-repatriable shares into repatriable shares?
Ans. FIPB approval is required. Where original investment was made in foreign exchange, the change is
allowed without any conditions; if not, the sale proceed will have to be repatriated to India by opening an
NRO account.
11. What is the mechanism for publicizing the changes in the FDI Policies?
Ans. Changes in FDI policies are brought out in the form of Press Notes by Department of Industrial Policy
& Promotion (DIPP). Soon after releasing the Press Notes to the media, it is also loaded on the Departmental
website (http://dipp.nic.in).
The detailed guidelines regarding the Indian investment abroad may be seen at the website (www.iic.nic.in)
of India Investment Centre, Department of Economic Affairs, Ministry of Finance.
Ans. International Centre for Alternative Dispute Resolution (ICADR) has been established as an autonomous
organization under the aegis of Ministry of Law, Justice and Company Affairs to promote settlement of
domestic and international disputes by different modes of alternate dispute resolution. ICADR has its
headquarters in New Delhi and has regional office in Lucknow and Hyderabad. More information on ICADR
can be obtained from the website:
13. What are the regulation for companies exporting and importing products from /into India?
(A) Exports:
Reserve Bank has made the Foreign Exchange Management (Export of Goods and Services) Regulations,
2000 relating to export of goods and services from India, notified vide Notification No. FEMA 23/2000-
RB, dated 3rd May, 2000; as amended from time to time.
The basic requirements under the exchange control regulations are that the exports are to be declared in :
§ GR (for all export transactions other than through the postal channel),
§ PP (for transactions through the postal channel) and
§ Softex forms (for software exports).
(i) Exemptions from Declarations
The requirement of declaration of export of goods and software in prescribed form will not apply in certain
cases such as
Import trade is regulated by the Directorate General of Foreign Trade (DGFT) under Ministry of Commerce
& Industry, Department of Commerce, Government of India.Authorised dealers, while undertaking import
transactions, should ensure that the imports into India are in conformity with the Export Import Policy in
force and relevant provisions of FEMA.
Ans.Upon change of residential status, intimation should be given to the bankers about the change of
Residential Status, so that the existing NRE, NRO or FCNR account is designated as a Resident Account,
with tenure and interest rates remaining unchanged and When a person resident in India becomes a Non-
Resident, so that the existing account is designated as a Non-Resident Ordinary Account (NRO).
15. If any permission from RBI is required to acquire or transfer agricultural land / plantation
property/ farm house by a person resident outside India or a foreign national, to whom should the
application be made? Is there any prescribed form for the application?
Ans. All requests for acquisition or transfer of agricultural land /plantation property/farm house by any
person resident outside India or a foreign national may be made to the Chief General Manager, Reserve Bank
16. Is there any restriction on number of residential properties that may be purchased by an NRI?
Is there any restriction on period of holding for such properties?
Ans. There are no restrictions on number of residential properties that may be bought by an NRI. However,
repatriation is allowed only in respect of two such properties and that, too, after three years from date of
acquisition of such property or from date of payment of final instalment, whichever is later.
17. Can NRI repatriate the full consideration upon the sale of his property?
Ans. India is a fully convertible on current account and partial on capital account. Remittance of sale
proceed is limited to the cost of property only and the amount of gain on sale of property, can not be
repatriated.
18. Is there any general prohibition from accepting any foreign contribution?
Ans. Yes, the following categories of persons are prohibited from accepting any foreign contribution either,
directly or indirectly or through any other person (which includes Non Resident Indian citizen for the benefits
of such categories of person:
(b) correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper,
However, certain exemption from general prohibition has been granted in Sec 8 of FCRA.
Ans. An association /trust/ society having definite culture, economic, educational, religious, or social
programme cannot accept foreign contribution unless it registers itself with the Central Government by
applying in Form No FC- 8 or gets prior permission by applying in Form FC-1A.
The Form has to be submitted to Ministry of Home Affairs, Lok Ayut Bhavan , Khan Market, New Delhi.
The registration process takes at least 5/6 months to complete while permission process takes 90 days.
CONTACT DETAILS
MINISTRY OF OVERSEAS INDIAN AFFAIRS
9th Floor, Akbar Bhawan, Chanakya Puri
New Delhi-110021
Tel: +91 11 2419 7900 Fax: +91 11 2467 4140
Annexure-I
Annexure-II
12. Courier services for 100% FIPB Subject to existing laws and PN 4 / 2001
carrying packages, exclusion of activity relating
parcels and other to distribution of letters,
items which do not which is exclusively reserved
come within the for the State.
ambit of the Indian www.indiapost.gov.in
Post Office Act,
1898.
13. Defence 26% FIPB Subject to licensing under PN 4 / 2001
production Industries (Development & &
Regulation) Act, 1951 and PN 2 / 2002
guidelines on FDI in
production of arms &
ammunition.
14. Floriculture, 100% Automatic PN 4 / 2006
Horticulture,
Development of
Seeds, Animal
Husbandry,
Pisciculture,
aqua-culture,
cultivation of
vegetables,
mushrooms,under
controlled
conditions and
services related to
agro and allied
sectors.
15. Hazardous 100% Automatic Subject to industrial license PN 4 / 2006
Chemicals, viz., under the Industries
hydrocyanic acid (Development & Regulation)
and its derivatives; Act, 1951 and other sectoral
phosgene and its regulations.
derivatives; and
isocyanates and
diisocyantes of
hydrocarbon.
16. Industrial 100% Automatic Subject to industrial license PN 4 / 2006
explosives- under Industries (Development
Manufacture & Regulation) Act, 1951 and
regulations under Explosives
Act, 1898
Agencies b. minimum
xii) Credit Rating capitalization norms
Agencies for non-fund based
xiii) Leasing & NBFC activities- US$
Finance 0.5 million.
xiv) Housing Finance c. foreign investors can
xv) Forex Broking set up 100% operating
xvi) Credit Card subsidiaries without
Business the condition to disinvest
xvii) Money changing a minimum of 25% of its
Business equity to Indian entities
xviii) Micro credit subject to bringing in
xix) Rural credit. US$ 50 million without
any restriction on number
of operating subsidiaries
without bringing
additional capital.
d. joint venture operating
NBFC's that have 75% or
less than 75% foreign
investment will also be
allowed to set up
subsidiaries for
undertaking other NBFC
activities subject to
subsidiaries also
complying with the
applicable minimum
capital inflow.
e. compliance with the
guidelines of the RBI.
· Food processing
· Electronic hardware
· Software development
· Film industry
· Advertising
· Hospitals
· Exploration and mining of minerals other than diamonds and precious stones
· Management consultancy
Annexure-IV
· Electricity Transmission
· Electricity Distribution
· Toll Roads
· Vehicular Bridges
· Architectural Services
Annexure-VI
INDUSTRIAL LICENSING
At present industrial license for manufacturing is required only for the following :
ii. Manufacture of items reserved for small scale sector by non-SSI units; and
iv. Industrial explosives, including detonating fuses, safety fuses, gun powder, nitrocellulose and matches;
v. Hazardous chemicals;
c. Isocyanates and di-isocyanates of hydrocarbon, not elsewhere specified (example: Methyl Isocyanate).
1.2. A person resident outside India who is a person of Indian Origin ( PIO) can acquire any immovable
property in India other than agricultural land/ farm house/ plantation property :-
a) By way of purchase out of funds received by way of inward remittance through normal banking channels
or by debit to his NRE/FCNR(B)/NRO account.
c) By way of inheritance from a person resident in India or a person resident outside India who had
acquired such property in accordance with the provisions of the foreign exchange law in force or FEMA
regulations at the time of acquisition of the property.
1.3 A PIO may transfer any immoveable property other than agricultural land/Plantation property/farmhouse
in India
1.4 A PIO may transfer agricultural Land/ Plantation property /farmhouse in India by way of sale or gift to
person resident in India who is a citizen of India
i) The immovable property was acquired by the seller in accordance with the provisions of the foreign
exchange law in force at the time of acquisition by him or the provisions of FEMA Regulations;
ii) The amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable
property in foreign exchange received through normal banking channels or out of funds held in Foreign
Currency Non-Resident Account or (b) the foreign currency equivalent as on the date of payment, of
the amount paid where such payment was made from the funds held in Non-Resident External account
for acquisition of the property.
iii) In the case of residential property, the repatriation of sale proceeds is restricted to not more than two
such properties.
iv) In the case of sale of immovable property purchased out of Rupee funds, ADs may allow the facility of
repatriation of funds out of balances held by NRIs/PIO in their Non-resident Rupee( NRO) accounts
upto US$ 1 mio per calendar year subject to production of undertaking by the remitter and a certificate
from the Chartered Accountant in the formats prescribed by the CBDT.
5.2 Foreign national of non-Indian origin resident outside India are not permitted to acquire any immovable
property in India unless such property is acquired by way of inheritance from a person who was resident in
India.
5.3 Foreign Nationals of non Indian origin who have acquired immovable property in India with the specific
approval of the Reserve Bank cannot transfer such property without prior permission of the Reserve Bank.
According to the above Notifications, remittance of capital assets in India held by a person whether resident
in or outside India would require approval of the Reserve Bank except to the extent provided in the Act or
Rules or Regulations made under the Act.
1.2 These remittance facilities are not available to a citizen of Nepal and Bhutan.
1.3 The remittance facility in respect of sale proceeds of immovable property is not available to a citizen of
Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
2.2 NRI/PIO may remit sale proceeds of immovable property purchased by him out of Rupee funds or as
a person resident in India as indicated in para 2.1 above.
2.3 In respect of remittance of sale proceeds of assets acquired by way of inheritance or legacy or settlement
for which there is no lock-in period, NRI/PIO may submit documentary evidence in support of inheritance
or legacy of assets, an undertaking by the remitter and certificate by a Chartered Accountant in the formats
prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002.
2.4 It is clarified that settlement is also a mode of inheritance from the parent, the only difference being
that the property under the settlement passes to the beneficiary on the death of the owner/parent without
any legal procedures/hassles and helps in avoiding delay and inconvenience in applying for probate, etc
2.5 The remittance facility in respect of sale proceeds of immovable property is not available to a citizen of
Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
3.2 Authorized dealers may permit repatriation of amounts representing the refund of application/earnest
money/purchase consideration made by the house building agencies/seller on account of non-allotment of
flat/plot/cancellation of bookings/deals for purchase of residential/ commercial property, together with
interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE/
FCNR account of the account holder, or remittance from outside India through normal banking channels
and the authorized dealer is satisfied about the genuineness of the transaction. Such funds may also be
credited to the NRE/FCNR account of the NRIs/PIOs, if they so desire.
3.3 Authorized dealers may allow repatriation of sale proceeds of residential accommodation purchased by
NRIs/PIOs out of funds raised by them by way of loans from the authorized dealers/housing finance
institutions to the extent of such loan/s repaid by them out of foreign inward remittances received through
normal banking channel or by debit to their NRE/FCNR accounts.
4.2 NRIs/PIOs have the option to credit the current income to their Non-Resident (External) Rupee
account, provided the authorized dealer is satisfied that the credit represents current income of the non-
resident account holder and income tax thereon has been deducted/provided for.
5.3 All other facilities available to NRIs under FEMA are equally applicable to the students.
5.4 Educational and other loans availed of by them as residents in India will continue to be available as per
FEMA regulations.
SUGGESTIONS